Corporate A.I.s, bankers and the bird of paradise.

I've spoken previously here (29-12-07 blog number 16) about the idea that large organisations can be seen as A.I.'s (Artificial Intelligences, although, as I said before, I'm tempted to refer to them as A.S.'s, as in Artificial Stupids). A recent documentary I watched, "The Corporation", (more info at www.thecorporation.com) confirmed some aspects of this idea and raised further interesting possibilities.

According to the documentary, a Corporation is classed in law as an individual, having much the same rights as human beings in that they (it) can buy and sell property and goods, sue and be sued, buy other corporations and such like.

During the documentary, the behaviour of corporations was compared to the behaviour of psychopaths, using criteria developed by respected bodies, such as the UN. These criteria included the following points; callous unconcern for the feelings of others, incapacity to maintain enduring relationships, reckless disregard for the safety of others, deceitfulness: repeated lying and conning of others for profit, incapacity to experience guilt and failure to conform to social norms with respect to lawful behaviour. It was not difficult to demonstrate that corporations fulfilled all these major criteria for psychopathy.

Before I pursue this idea further, I want to draw in a few more strands.

The economic turbulence of the past few months has raised a lot of questions about how such a thing could occur when we apparently have rules and regulations to govern the behaviour of financial institutions. I'm reminded here of the ant colony where individual ants follow a very limited set of rules that govern their behaviour and, lo, the ant heap arises as an emergent property of the combination of the myriad individual behaviours. No individual ant is aware of this process; there is no ant king or queen directing the individual ants. It is simply (!) a consequence of individuals carrying out their individual actions according to a set of rules.

Is a similar process applicable in our economic system? The primary goal of corporations, as defined in laws (rules) governing their existence, is to pay dividends to shareholders. This primary goal takes precedence over any other limiting factor, whether social, environmental or personal. Similarly, rules govern the behaviour of bankers, and no one, apparently, has really broken the rules.

It is important to realise that most of the people who are employed by corporations probably live decent enough lives outside of their work; with family and friends they may well be loving and generous. But within the corporate workspace, their individual, well intended actions can combine to produce extraordinarily ruthless behaviour.

There are several points here, "I'm just doing my job" being the obvious one but its also worth noting the infamous behaviourist experiment where volunteers were encouraged to give apparently increasingly powerful electric shocks to another individual at the request of an authority figure. This they did, even when they thought the other individual was suffering extreme pain. So it is ok to do something because it is my job, I was told to do it by someone important (my boss, the government etc), I had no choice, everyone else does it, its not against the rules.

A further strand to add in here is the bird of paradise evolving its hugely ornate tail. A longer, more elaborate tail was more successful at attracting a mate, thus the birds with longer more elaborate tails passed on their genes, leading to the evolution of longer and longer and more and more elaborate tails.

If we apply this to what seems to have happened in the financial system, we can see how the gradual tweaking of the limits of rules led, for example, to the steady increase in bonuses for bankers as multiples of their salaries (up to ten times a salary of £150,000 to £300,000 per year) or the increasingly risky loans that were being handed out. In the case of the bird of paradise, the limit to the maximum length and elaboracy of their tails is governed by the ability to still feed, fly, reproduce and so pass on their genes. So If an individual bird's tail is so ridiculously long and elaborate it is a physical encumbrance, they die and the genes are not passed on.

In regards to the economic system, we can see that there is a clear correspondence between the rules that govern individuals (human or corporate AI) and the behaviour of the whole system. The rules we have currently been operating by have led to the emergent property we can loosely call global capitalist consumerism. Currently governments, such as the UK and US, are looking at re-writing some of the rules governing financial institutions in an attempt to limit the bird of paradise effect (so its ok to get rich but not stupidly rich).

But it is important to remember that the economic system, human beings, human communities and the environment are all classed as complex systems and there are various characteristics that are common to all complex systems. Any changes in the rules (or starting conditions) of the system, will alter the emergent properties of the system. Very small changes can have very profound effects. Complex systems are, at some level, inherently unpredictable (think about the weather). Another way to put this rather baldly is that "we don't really know what we are doing". So be careful; we have already seen how rushing into things can actually make things worse, despite our best intentions (see my blog 18-05-07 Biofuels, the disaster, for example).

To finally return to corporations and pathology, it might be worth us thinking of corporations as artificial intelligences which are currently insane. One interesting possibility arising from this is that a keen legal eagle could take a corporation to court on the grounds of insanity, have it sectioned as criminally insane and committed to a mental institution, though what form that institution would take is another matter. A further, perhaps more positive approach may be to consider what form of therapy might be suitable for a mad corporate AI.